Dubai Mortgage Buyers Face 6% Higher Upfront Costs Under New Central Bank Rules

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New UAE‑mortgage rules increase upfront costs in Dubai, boosting demand for professional mortgage‑advisory and structuring services.

Central Bank of the UAE has stopped banks from financing DLD registration fees and brokerage commissions through mortgages from 1 February 2025.
Dubai property buyers must now pay an additional 6% of the purchase price upfront in cash, comprising 4% DLD fees and 2% brokerage costs.
The change brings actual loan-to-value ratios closer to the 80% regulatory cap by preventing fees from being hidden inside mortgage amounts.
On a AED 2 million property, buyers now need approximately AED 520,000 to AED 540,000 in upfront cash for down payment and fees combined.
Mortgage-advisory firms are reporting increased demand for cash-flow planning, structuring services, and pre-application consultations.
Industry observers expect the rule to favour buyers with savings discipline while increasing the strategic role of professional mortgage advisors.

Responsible Lending Framework Reshapes Dubai Property Finance

The Central Bank of the UAE has implemented new mortgage registration requirements that fundamentally alter the cash-flow dynamics of Dubai property purchases. From 1 February 2025, banks can no longer finance Dubai Land Department (DLD) registration fees or real estate brokerage commissions through mortgage loans. The directive aims to strengthen the responsible lending framework by ensuring that loan-to-value (LTV) ratios accurately reflect actual property financing rather than bundled transaction costs.

The structural change requires buyers to pay an additional 6% of the purchase price upfront, effectively separating property financing from ancillary transaction fees. Industry analysts describe the move as a transparency measure rather than credit tightening, though it significantly increases the initial capital required to complete a mortgaged property purchase in Dubai.

What the New Rules Mean for Buyers

Under the revised structure, Dubai property buyers must now pay the following costs in cash at point of sale. The 4% DLD registration fee, traditionally split between buyer and seller but often borne entirely by the buyer in secondary-market transactions, must be paid upfront. The 2% real estate brokerage commission, payable to the sales agent or developer, also requires immediate cash payment.

On a AED 1 million property, this translates to an additional AED 60,000 in upfront cash beyond the standard down payment. For a AED 2 million property, the extra 6% equals AED 120,000, pushing total initial cash requirements to between AED 520,000 and AED 540,000 when combined with a 20% down payment.

Additional costs remain part of the transaction, including a DLD trustee fee of approximately AED 4,200, title deed issuance fees of around AED 500 to AED 580, and mortgage registration fees of 0.25% of the loan amount. Mortgage-advisory platforms estimate that total upfront costs now amount to roughly 6% to 7% of property value plus the down payment, compared to lower headline figures when DLD and brokerage could be financed.

Regulatory Rationale and Market Context

The Central Bank's directive addresses a structural issue in Dubai's mortgage market where banks had been financing up to 80% of total transaction costs. This practice effectively pushed the true LTV ratio to around 85% of property value, according to Money Maestro, a Dubai-based mortgage-advisory firm. By excluding DLD and agency fees from the financed amount, regulators aim to maintain the 80% LTV cap on actual property value.

The National and other industry publications emphasise that the change is not a rate increase or credit-tightening measure. Instead, it represents a structural shift in how upfront property-purchase costs are funded, bringing greater clarity to the distinction between property financing and transaction-fee financing.

Impact on Buyer Behaviour and Market Dynamics

Mortgage-advisory firms report noticeable shifts in buyer behaviour since the directive took effect. Some developers are offering DLD-fee waivers or partial-fee coverage as promotional incentives, making off-plan units relatively more attractive than secondary-market properties where buyers bear the full 6% upfront.

First-time buyers and expatriate salary-earners are focusing more intensively on cash-flow and savings planning. Mortgage advisors now routinely build dedicated cash-plan models that separate down payment, DLD and brokerage budgets, alongside contingency amounts for additional costs.

Rajender Prasad, managing director of Money Maestro, noted that the Central Bank's move promotes more realistic lending and better-informed buyers. However, he warned that higher upfront requirements could push some marginal buyers out of the market or into longer-term savings plans before they can proceed with a purchase.

Growing Demand for Professional Mortgage-Advisory Services

The rule change has elevated the strategic and advisory role of mortgage brokers in Dubai's property market. With cash requirements now more visible and substantial, brokers are reporting higher volumes of consultations around loan tenor, pre-payment strategies, and product comparison to minimise overall interest costs.

Mortgage-advisory firms are positioning themselves as cash-availability and structuring advisors, not merely product-placement channels. Typical services now include upfront-cost calculators and scenario-modelling tools that show buyers exactly how much cash they need at different property prices and down-payment levels.

Advisory platforms are also providing cash-flow-friendly structuring advice, optimising loan tenors, reviewing pre-payment options, and matching mortgage terms to expected future income events such as bonus cycles or property sales. For expatriates, cross-border-income and multi-currency-finance guidance helps align foreign-currency inflows with dirham-denominated upfront costs.

Implications for the Mortgage-Advisory Profession

Industry observers expect the new rules to favour buyers who already maintain savings discipline or have access to family support. The change increases the importance of professional mortgage-advisory intervention, particularly for first-time or financially-constrained applicants who must now plan significantly larger cash outlays before entering the market.

Mortgage-advisory platforms are developing educational content explaining the 6% rule, including worked examples, side-by-side comparisons of pre-rule and post-rule cash requirements, and product-suggestion frameworks tailored to different down-payment levels. Pre-application engagement is becoming standard practice, with mortgage advisors working alongside real-estate agents and developers to help buyers understand total-cost implications before committing to specific properties.

The shift represents a move from transaction-level fee generation to integrated, advice-driven service models. This aligns with the UAE's broader regulatory push towards professional financial advisory, responsible lending practices, and transparency in consumer-credit products across the financial sector.